Company has became third largest PC maker

By
Michael Kan
|
18 August 2011
|
IDG News Service

Profits grew by 98 percent to $108 million, while revenue increased 15 percent to $5.9 billion, the company said on Thursday. The quarter is the first in the company's current fiscal year.

The Chinese company reported that both desktop PC and laptop shipments for the quarter increased by 23 percent from the same period last year. This comes in spite of PC shipments slowing as a result of growing interest in tablets, and a decline in consumer and business spending because of economic conditions, analysts said.

In the past quarter, Lenovo became the third largest PC vendor, overtaking rival Acer, according to research firm IDC. Lenovo has a 12.2 percent share of the market, putting it behind Hewlett-Packard and Dell.

Lenovo however leads in China, which is projected to become the world's largest PC market in sales by 2013, claiming a 31.7 percent market share. Lenovo surged ahead in China in the second quarter, boosted by its ongoing expansion efforts to smaller cities, IDC said in July. The company led in Asia-Pacific, excluding Japan, with a 22.5 percent market share, up from 19 percent in the previous quarter.

The company is protecting its home turf in China while expanding into developing markets like Latin America, Eastern Europe, Africa and India, where the company's PC shipments increased by 46.5 percent in the quarter.

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Lenovo also reported growth in mature markets including the U.S., Japan and Western Europe, with PC shipments increasing by 8.5 percent. In North America, Lenovo's PC shipments grew 30.8 percent.

While PCs have been Lenovo's core business, the company is also focused on becoming a larger player in the tablet and smartphone markets. The company saw in the quarter an increase of 34 percent in total handset shipments from the same period a year ago.

In the tablet market, Lenovo launched its LePad in China earlier this year. Sales of the device have reached 80,000 units. Lenovo aims to grab a 20 percent share of China's tablet market by the end of the year, said Lenovo CEO Yang Yuanqing during an earnings call on Thursday.

Lenovo, which has been using Google's Android OS for its mobile devices, said the search giant's recent plan to acquire Motorola Mobility was a positive move. "Google is a strategic partner as well, so I believe this acquisition can help us to strengthen our IP position," Yang said.

We have been hearing for years how CIOs and senior IT professionals need to bury the hatchet with line of business managers and, instead of focusing on the latest bleeding-edge technology for its own sake, seek to better understand the overall strategic objectives of their organisations.